Amazon Offers $80 Mn For FreeCharge Acquisition: Reports

Amazon Offers $80 Mn For FreeCharge Acquisition: Reports

FreeCharge May Be Merged With Amazon's Digital Wallet Business Amazon Pay

Ecommerce giant Amazon has joined the list of prospective buyers for digital wallet FreeCharge. As per recent reports, Amazon has made an offer of about $70 Mn-$80 Mn for the acquisition. The offer was made with a term sheet signed by Amazon last week.

If Amazon manages to acquire FreeCharge, it may be clubbed with Amazon’s digital payments entity, Amazon Pay India. Amazon recently poured about $30 Mn into Amazon Pay. In April 2017, the Indian arm of the ecommerce company secured the licence from the Reserve Bank of India (RBI) to operate a prepaid payment instrument (PPI).

FreeCharge Acquisition: Who Are The Contenders

Jasper Infotech-owned FreeCharge has been in acquisition talks for months. The digital wallet, once valued at $5 Bn, was acquired by Snapdeal in a deal worth $400 Mn -$500 Mn in 2015. Currently, it is on the verge of getting sold for a fraction of that amount.

In May 2017, parent company Jasper Infotech, also made a fresh investment of $3.38 Mn (INR 22 Cr) in the digital wallet. Prior to this, Snapdeal already pumped $20 Mn into the online payment platform in March 2017.

Acquisition talks for FreeCharge have been doing the rounds for over six months now. Initially, in December 2016, it was reported that PayPal was planning to acquire a significant stake in FreeCharge. Later, after news of Snapdeal’s acquisition by Flipkart surfaced, multiple names for acquiring the digital wallet business came forward.

Earlier this month, Mumbai-headquartered Axis Bank was reported to be in talks to acquire mobile wallet FreeCharge. The offer was estimated to fetch $100 Mn (INR 625 Cr) for parent company Jasper Infotech.

The future of Jasper-owned businesses, Snapdeal, FreeCharge, and Vulcan Express is uncertain. The market is rife with numerous reports of prospective bids for the acquisition of these businesses. The upcoming months may finally put an end to these speculations, once deals actually materialise.

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After a 2-year-stint at Ernst & Young, Aparna moved to Journalism. Her prior experience enables her to understand business management. An avid reader and a traveller she hopes to gain insights on the startup ecosystem at Inc42.